Auto Donations

When a person has a vehicle that he or she no longer has any use for, there are several ways that he or she can go about getting rid of it. Depending on the value of the vehicle, a person may decide to sell it, trade it, or even junk it. Another option is to donate it to charity. Donating to a charitable organization can be beneficial to both the charity and the person who is making the donation. Before making the decision to donate an unwanted vehicle, however, it is important to understand what can be donated, what the benefits are, and the process involved.

Cars are not the only type of vehicle that charities accept for donation. Boats, trucks, vans, motorcycles, SUVs and RVs are all examples of vehicles that many charities will accept. Before making a donation, it is important to contact the specific charity to determine exactly what is accepted and in what condition. In many cases, the vehicles may or may not be in running condition. Again, this is determined by the specific charity and how they plan to put the donation to use.

Charities use vehicle donations in a number of different ways. Cars and other vehicles that have been donated to charities may be donated to families in need. In other cases, the cars are sold by the charity or auctioned. If a vehicle has little to no value, it may be recycled. Any proceeds from the vehicle are used to support the charity's cause. For this reason, it is important for the donor to choose the charity carefully, to ensure that the proceeds are going towards a cause that he or she feels strongly about.

In addition to helping out a favorite charity, there are other reasons why people choose to donate their vehicles as opposed to selling or junking them. For some people, the time and effort of selling a car is not worth the effort. If the vehicle is old, in need of repairs, or no longer operates, he or she may want to simply get rid of it without spending additional money. For a great majority of people, the idea of a tax deduction is a convincing enough reason to donate. After making the donation, it is important to transfer the title of the donated vehicle to the charity. This will eliminate the risk to the donor of getting fined or cited for violations after the car has been donated.

Make certain the charity is a qualified non-profit. Political organizations, for example, are not acceptable non-profits and donations made to them will not be tax-deductible. The correct type of organization is a 501 (c)(3). A donor must qualify for a deduction before he or she can claim a car deduction. On the tax Form 1040, he or she must itemize deductions on Schedule A. In addition, the deduction cannot be greater than 50 percent of the vehicle donor's adjusted gross income. When donating a vehicle, the donor should not expect his or her deduction to match the cars actual value. If the car, or vehicle, is worth less than $500, the fair market value may be reported. It should also be reported if the vehicle is kept and used by the charity. If it is worth greater than $500, the donor must obtain a receipt from the charity. He or she will also need to include Form 8283 from the IRS when filing his or her tax return. The receipt should reflect how much the charity made from the sale of the vehicle. If the car, boat, or vehicle is more than $5000, an appraisal is necessary.

Donating a vehicle to charity may seem simple on the surface, however, it is important to understand the process in order to enjoy the tax benefits associated with it. Whether donating a motorcycle, a truck, or the family car, the key is to select the right type of charity. This will determine whether or not a deduction is possible or not. Completing all of the appropriate paperwork from the transfer of title to the paperwork for the IRS, is also critical. Despite the work involved, the benefits of contributing to a favorite charity and receiving a tax deduction is worth the effort.

To learn more about vehicle donations to charity, please review the following list of links.


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